>>> Treasury Market Summary

Treasury Market Summary
Lower Finish to Shortened Week
  • U.S. Treasuries finished the abbreviated week on a broadly lower note, but intraday action was confined to a narrow range just above morning lows. Treasuries followed yesterday's Thanksgiving closure with a lower start that returned the 30-yr yield to little changed for the week while yields on shorter tenors were pushed above their closing levels from last week. The lower start followed a night that saw selling in other sovereign debt and a muted showing from most global equity markets. Treasuries marked lows during the first few minutes of action before returning to their starting levels over the next 30 minutes or so. The opening hour set a narrow trading range that was respected throughout the day by most tenors. The 2-yr note showed some intraday underperformance, setting a fresh low in the late morning. That resulted in a five-basis point increase in the 2-yr yield for the week while the 10-yr yield rose three basis points since last Friday, pressuring the 2s10s spread to -48 bps from -46 bps at last week's settlement. Crude oil faced more selling pressure, giving back this week's gain, while the U.S. Dollar Index fell 0.4% to 103.36, slipping back below its 200-day moving average (103.61). The Index lost 0.4% this week.
  • YieldCheck:
    • 2-yr: +5 bps to 4.95% (+5 bps for the week)
    • 3-yr: +4 bps to 4.67% (+3 bps for the week)
    • 5-yr: +5 bps to 4.49% (+3 bps for the week)
    • 10-yr: +5 bps to 4.47% (+3 bps for the week)
    • 30-yr: +5 bps to 4.60% (UNCH for the week)
  • News:
    • Bank of England Chief Economist Pill cautioned that the central bank can't ease monetary policy due to weakening economic activity because inflation remains high.
    • European Central Bank policymaker Villeroy de Galhau said that he doesn't expect another rate hike from the ECB unless an "unexpected event" takes place.
    • Germany's Finance Minister Lindner said that the supplementary budget for 2023 will be submitted to the cabinet next week.
    • The World Health Organization has reportedly been in contact with Chinese authorities regarding the recent increase in respiratory illness in the northern part of the country.
    • China's Premier Li met with France's foreign minister, highlighting an improved relationship between the two nations.
    • New Zealand's National Party, New Zealand First, and Association of Consumers and Taxpayers signed a coalition agreement. Incoming Prime Minister Luxon indicated that rules governing the Reserve National Bank will be rewritten to focus on price stability.
    • Japan's October CPI was up 0.9% m/m (last 0.3%), increasing 3.3% yr/yr (expected 3.4%; last 3.0%). October Core CPI was up 2.9% yr/yr (expected 3.0%; last 2.8%). Flash November Manufacturing PMI fell to 48.1 from 48.7 (expected 48.8) and flash Services PMI fell to 48.1 from 48.7 (expected 48.8). September Leading Index fell to 108.9 from 109.2 (expected 108.7) and Coincident Indicator was up 0.1% m/m (last 0.1%).
    • Singapore's October Industrial Production rose 9.8% m/m (expected 0.1%; last 13.1%), increasing 7.4% yr/yr (expected -2.1%; last -1.1%).
    • New Zealand's Q3 Retail Sales were unchanged qtr/qtr (expected -0.8%; last -0.9%).
    • Germany's final Q3 GDP contracted 0.1% qtr/qtr, as expected (last 0.0%), falling 0.4% yr/yr (expected -0.3%; last 0.1%). November ifo Business Climate Index rose to 87.3 from 86.9 (expected 87.5), November Current Assessment rose to 89.4 from 89.2 (expected 89.5) and Business Expectations rose to 85.2 from 84.8 (expected 85.7).
    • Spain's October PPI was down 7.8% yr/yr (last -8.5%).
  • Today'sData:
    • S&P Global U.S. Manufacturing PMI fell to 49.4 in the flash reading for November from October's final reading of 50.0.
    • S&P Global U.S. Services PMI rose to 50.8 in the flash reading for November from October's final reading of 50.6.
  • Commodities:
    • WTI crude: -2.5% to $75.18/bbl
    • Gold: +0.5% to $2003.40/ozt
    • Copper: +0.5% to $3.79/lb
  • Currencies:
    • EUR/USD: +0.4% to 1.0947
    • GBP/USD: +0.6% to 1.2610
    • USD/CNH: UNCH at 7.1491
    • USD/JPY: -0.1% to 149.44
  • TheAhead:Week
    • Monday: October New Home Sales ( consensus 720,000; prior 759,000) at 10:00 ET; $54 bln 2-yr Treasury note auction results at 11:30 ET; and $55 bln 5-yr Treasury note auction results at 13:00 ET
    • Tuesday: September FHFA Housing Price Index (prior 0.6%) and September S&P Case-Shiller Home Price Index (consensus 4.1%; prior 2.2%) at 9:00 ET; November Consumer Confidence (consensus 100.0; prior 102.6) at 10:00 ET; and $39 bln 7-yr Treasury note auction results at 13:00 ET
    • Wednesday: Weekly MBA Mortgage Index (prior 3.0%) at 7:00 ET; Q3 GDP -- second estimate ( consensus 4.9%; prior 4.9%), Q3 GDP Deflator -- second estimate (consensus 3.8%; prior 3.5%), October advance goods trade balance (prior -$85.8 bln), October advance Retail Inventories (prior 0.9%), and October advance Wholesale Inventories (prior 0.0%) at 8:30 ET; weekly crude oil inventories (prior 8.7 mln) at 10:30 ET; and November Fed Beige Book at 14:00 ET
    • Thursday: Weekly Initial Claims ( consensus 215,000; prior 209,000), Continuing Claims (prior 1.840 mln), October Personal Income (consensus 0.2%; prior 0.3%), Personal Spending ( consensus 0.2%; prior 0.3%), PCE Prices ( consensus 0.1%; prior 0.4%), and Core PCE Prices (consensus 0.2%; prior 0.3%) at 8:30 ET; November Chicago PMI (consensus 45.0; prior 44.0) at 9:45 ET; October Pending Home Sales (consensus -2.3%; prior 1.1%) at 10:00 ET; weekly natural gas inventories (prior -7 bcf) at 10:30 ET
    • Friday: Final November S&P Global U.S. Manufacturing PMI (prior 49.4) at 9:45 ET; November ISM Manufacturing Index (consensus 47.5%; prior 46.7%) and October Construction Spending ( consensus 0.3%; prior 0.4%) at 10:00 ET